WALVIS BAY – TransNamib’s road services will come to an end as from June this year to focus more on its core business – moving cargo via rail.
This is according to the CEO Johnny Smith, who told stakeholders here yesterday.
An upbeat Smith chronicled some of the successes attained at the company, including emerging from insolvency and being able to borrow from the financial market, as a result of an upturn in the often-embattled national transportation company.
Smith, who was speaking at the launch of the Namibia state of logistics report, said TransNamib plans to double up freight volumes from about 1.5 million tonnes to three million tonnes within the next four years, in line with the national logistics hub vision.
According to Smith, cargo volume increased by seven percent within a year, the best TransNamib has seen in the past 10 years or so.
Hence, he said that it was important for TransNamib to take such a decision, as there are others that do road service better than them.
“Rail and passenger service should be our main focus and TransNamib is currently lobbying with the logistics industry to foster partnerships,” Smith explained.
The CEO conceded that TransNamib is not perfect but wants to improve and maintain its core business going forward, as Cabinet finally approved its five-year strategic plan in December.
He says this was the seventh strategic plan presented to Cabinet and the only one that got approval after about 40 meetings. Hence it is important for the company to grow rail cargo.
“We can offer one train that can carry the content of 30 trucks as well as dedicated bulk trains that can go from station to station. That is what we want to put in place,” he explained.
Smit did not reveal the impact, in terms of job losses, the complete migration to rail would have on especially the company employees working currently for its road services, such as truck drivers.
Apart from this, he says TransNamib has also reduced the number of locomotives it was leasing from Transnet South Africa.
He added that TransNamib also started developing rail transport agreements with clients to push the institution in reaching its targets and also provides protection and trust to its clients.
However, TransNamib needs about N$200 million to rehabilitate about 10 locomotives and push them into the existing fleet to grow rail volumes and to boost revenue.
“These funds will improve the core business and also the maintenance of old locomotives that need refurbishment as this can help the institution to generate an additional 50 percent of revenue,” Smith explained.
He also said that TransNamib’s balance sheet is currently positive, with the company now able to borrow from financial institutions.
“It has been a difficult year. It is not a joke for me to run a company at a loss. But at least it is less that what it was before on a monthly basis,” he said.
“Some of the costs have been reduced and the company shows a much stronger balance sheet now, taking in consideration that it was insolvent. Now we can at least go to a bank and borrow money, something that was impossible in the past,” Smith confidently said.